American Eagle Outfitters, Inc. (AEO): A Bull Case Theory 

We came across a bullish thesis on American Eagle Outfitters, Inc. on Arya’s Substack. In this article, we will summarize the bulls’ thesis on AEO. American Eagle Outfitters, Inc.’s share was trading at $15.71 as of October 21st. AEO’s trailing and forward P/E were 16.62  and 11.29 respectively according to Yahoo Finance.

American Eagle Outfitters (AEO) operates through its core American Eagle (AE) brand, the fast-growing Aerie lifestyle and intimates line, and the OFFLINE activewear sub-brand. AE remains the #1 jeans brand for women and youth, while Aerie continues to expand on its inclusive “#AerieREAL” platform, now representing roughly one-third of total revenue.

Together, the brands provide diversification across demographics and categories, supported by AEO’s omnichannel model spanning 1,172 stores and a growing e-commerce channel that contributes over 30% of revenue. Despite exposure to mall traffic declines and tariffs that could cost up to $50 million in 2025, AEO’s broad reach and agile sourcing remain key strengths.

The company’s 2025 brand momentum has been driven by viral marketing collaborations, including the “Sydney Sweeney’s Got Great Jeans” and Travis Kelce’s Tru Kolors campaigns, which generated record engagement, traffic gains, and new customer acquisitions. These campaigns rejuvenated AE’s relevance and helped reverse sales softness, contributing to stronger-than-expected Q2 results and a share price surge of over 20%.

Financially, AEO reported record FY2024 revenue of $5.33 billion with 8.3% adjusted operating margins and EPS of $1.74, though FY2025 guidance is more cautious amid macro headwinds. Aerie’s consistent growth continues to offset slower denim trends, while cost control and efficiency gains have supported profitability.

At ~8–10× P/E and 0.5× sales, AEO trades at deep value multiples, reflecting investor skepticism over its staying power. Yet with Aerie’s expanding footprint, omni-channel investments, and marketing-driven brand heat, AEO presents a potential turnaround story—offering meaningful upside if recent momentum proves sustainable.

Previously we covered a bullish thesis on lululemon athletica inc. (LULU) by FeedbackAlarmed5045 in May 2025, which highlighted the company’s premium brand, pricing power, and international expansion. The stock has depreciated approximately by 35.16% since our coverage due to macro headwinds and valuation pressures. The thesis still stands as LULU’s brand moat and discipline remain strong. Arya shares a similar view but emphasizes AEO’s diversified growth and value positioning.

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Disclosure: None.